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A new approach to identifying potential R&D tax claims

The R&D tax credit scheme continues to grow in popularity each year, but the number of claims made is still well below the number of projects that may be eligible for this relief.

It is difficult to put an exact number on how much R&D tax relief goes unclaimed but previous attempts have estimated that as much as 80 per cent of eligible projects don’t benefit from the relief available to them.

In many cases, businesses assume that this form of tax relief is only suitable for those at the cutting edge of digital technology or science, but the relief covers most research and development that can show that it:

  • Aimed to make an advance in an area of science and technology
  • Involved technological uncertainty
  • Made efforts to overcome this uncertainty
  • Couldn’t have been easily worked out by a professional in the field.

 In short, if a company is a technical specialist in their field that makes an advance, and they weren’t sure if they could achieve the scientific or technological aims of the project, you’ve got technical uncertainty and a potential claim if others couldn’t have delivered a similar solution.

This means, for example, that if a business in the agricultural sector develops a new method of fertilising soil, or if a surgeon creates a new technique in plastic surgery, their R&D investment could be recouped via this scheme.

It is often down to these businesses’ accountants and advisers to spot the potential for a claim in their accounts, but this is sometimes not easily achieved.

In many cases, it is only where an accountant digs deeper into a company’s finances or has a strong bond with clients that it can spot the potential for a claim.

Even where an opportunity to make a claim is identified, the business or its accountants may not have sufficient resources, time or knowledge to prepare a successful claim.

During the last year, businesses in the UK have had to adapt quickly to the ever-changing rules and regulations around work and life.

This is likely to have sparked a wave of small, but important innovations within many companies, which could be eligible for relief, where it is identified.

How Made.Simplr can help

To help businesses and their accountants, we have developed a cloud-based solution, which automates the claim preparation process – taking away the burden of producing a claim and speeding up the process considerably.

By using our technology accountancy firms can also considerably reduce the cost of preparing a claim and open up the relief to a wider potential pool of clients.

If you are digging deeper to find out whether a business can make a claim, why not speak to our team to find out how we can help.

 

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